Mortgage Guide
Shared Appreciation Mortgages
Shared appreciation mortgages are relatively new and are no longer necessarily called shared appreciation mortgages in the industry, but now fall under the shared equity umbrella.
The main features of a shared appreciation/equity mortgage, is that the borrower takes out a normal mortgage and a low cost or free loan in addition. This way you can borrow more, making that first step possible.
Typically these mortgages are aimed at first time home buyers but they are by no means limited to first timers, but you need to take mortgage advice first.
In exchange for making 2 loans, one of which is a mortgage, the lender requires a pro-rata share of any increase in equity of the property when you sell up. The interest on the ‘top up' loan may be zero for a certain amount of years or may be set at a very low level. The shared equity or shared appreciation mortgage works on a shared appreciation basis thus: you put down a deposit, which could be as little as 3%. The loan is then divided between a conventional mortgage and a residential ownership loan which is set at between 15% to 35% of the property's value. When you come to sell, the mortgage lender takes a share in any increase or decrease in the property's value, in the same proportion as the residential ownership or top-up loan. This means that if the property rockets in value during your occupation, you will not be able to keep all of that increase to yourself.
The Government's shared equity scheme is based on shared appreciation but it is actually described instead as ‘Shared Equity'. This scheme is no longer limited to key workers. To find out more, see our shared equity section and contact your local HomeBuy agent.
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mortgage advice Features, advantages and disavantages of specific first time buyer mortgages:
100% Mortgages l
Cashback Mortgages l
High LTV Mortgages l
Graduate Mortgages l
Professional Mortgages l
Mortgages with Parents l
Guarantor Mortgages l
Family Offset Mortgages l
Mortgages with Friends or Family l
Mortgages at University l
Rent a Room Mortgages l
Affordable Mortgages l
Interest only Mortgages l
Part Repayment Part Interest Mortgages l
Interest-free Start Mortgages l
Shared Ownership Mortgages l
Poor, Adverse or Poor Credit Mortgages l
Key Worker Mortgages l
Shared Equity Mortgages 30,35,40 year term mortgagesOther mortgage guides, advice and useful pages:
Mortgage Comparison -
First Time Buyer Mortgages - About
First Time Buyer Mortgage Advice -
First Time Buyer Mortgage Brokers -
Buy to Let Mortgages for First Time Buyers -
Remortgages for First Time Buyers -
Shared Ownership Mortgages -
Shared Equity Mortgages -
Help with Mortgages for First Time Buyers -
Mortgages for Parents of First Time Buyers -
Shared Appreciation Mortgages -
Joint Mortgages -
Financial Advice for First Time Buyers -
Overseas Mortgages for First Time Buyers - Request
First Time Buyer Mortgage Advice - Find your
First Property - New Build
Gifted Deposit Deals -
Best First Mortgages Comparison TableUseful websites:
www.cml.org.uk – council of mortgage lenders